DealBook: Chinese E-Commerce Giant Alibaba to Ban Bitcoins on Its Sites

DealBook: Alibaba Invests in a Search Engine for Apps

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Breaking Views: Why an Alibaba I.P.O. Is Both Promise and Problem for Yahoo

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DealBook: Alibaba Buys Stake in Sina Weibo, China's Twitter

Vincent Yu/Associated PressJack Ma, the Alibaba chairman, said two platforms would make the mobile Internet a core part of Alibaba’s strategy.

5:32 p.m. | Updated

The Internet giant Alibaba was once known as China’s answer to eBay. Now it is forging closer ties to the country’s counterpart to Twitter.

Alibaba agreed on Monday to buy an 18 percent stake in the Sina Corporation’s Weibo, the most popular of China’s microblogging services, for $586 million. It has the right to raise its stake to 30 percent in the future.

The deal values Weibo at about $3.3 billion — equivalent to Sina’s entire market value as of Friday.

Alibaba and Sina also agreed to cooperate in improving ways to marry social networking with e-commerce, as microblogging services like Sina’s continue to grow in popularity. Sina Weibo said that last year it had more than 46 million daily active users, an increase of 82 percent from the period a year earlier.

That remains a fraction of Twitter’s user base, however. And a recent study of about 30,000 Sina Weibo users found that about 57 percent of the sampled accounts had no measurable activity or posts.

Alibaba continues to grow, most recently being valued by analysts at more than $55 billion. It has reshuffled its management ranks ahead of a much-anticipated initial public offering that could come as soon as this year.

The growth of social networking and its close ties to the continuing boom in mobile Internet usage have prompted a natural response: how to make money from the phenomenon. Sina and Alibaba expect their efforts to yield about $380 million in advertising and commercial revenue for the Weibo service over the next three years.

“We believe that the cooperation of our two robust platforms will bring unique and valuable services to Weibo users, as well as making the mobile Internet a core part of Alibaba’s strategy,” Jack Ma, the Alibaba chairman, said in a statement.

DealBook: Yahoo's Chief Reviews Plan for Alibaba Proceeds

Andrew Harrer/Bloomberg NewsMarissa Mayer, the new chief of Yahoo.

Marissa Mayer, Yahoo’s newly minted chief executive, is reworking the company’s playbook and nothing seems off limits.

According to a filing submitted on Thursday, Ms. Mayer — who joined Yahoo last month — was “reviewing the company’s business strategy.”

The filing to the Securities and Exchange Commission said that she was assessing the company’s restructuring plan, its acquisition strategy and its plans to spend the billions in proceeds that it expects to reap from its pending deal with the Alibaba Group. Yahoo, which is waiting to complete a deal to sell a large block of Alibaba shares back to its Chinese partner, has previously said that it would distribute those proceeds to Yahoo shareholders, perhaps through a buyback program.

That plan, however, is now up for debate. “This review process may lead to a re-evaluation of, or changes to, the company’s current plans, including its restructuring plan, its share repurchase program, and its previously announced plans for returning to shareholders substantially all of the after-tax cash proceeds of the initial share repurchase by Alibaba Group,” the company said in the filing.

Yahoo did not respond to requests for comment. Shares of Yahoo, which slipped 1 percent on Thursday to close at $16.01, continued to fall in after-hours trading.

Alibaba, the Chinese e-commerce giant, is close to raising about $8 billion to buy back a 20 percent stake that Yahoo owns. From the deal, Yahoo will reap about $7.1 billion, before taxes.

Ms. Mayer, a former Google executive, is trying to lay out a clear road map for Yahoo, which has been bruised by a string of management shuffles. So far this year, three executives have led Yahoo, including Scott Thompson, the former president of PayPal who left in the wake of an inquiry into his academic credentials, and Ross Levinsohn, who briefly served as the company’s interim chief executive. Mr. Levinsohn, who ran Yahoo’s media business, resigned last week.

DealBook: Alibaba Is Said to Be Close to Raising $8 Billion

Nelson Ching/Bloomberg NewsEmployees at the headquarters of the e-commerce Alibaba.com subsidiary in Hangzhou, Zhejiang Province, in February.

Some American Internet companies may be unpopular with investors these days, but a Chinese one is finding plenty of takers.

The Alibaba Group, a Chinese e-commerce giant, is close to completing a more than $8 billion round of financing that will value it at as much as $43 billion in equity, according to two people briefed on the matter. Alibaba plans to use the bulk of that new money to buy back a 20 percent stake in itself from Yahoo for $7.1 billion. Yahoo owns 40 percent of Alibaba.

One Yahoo executive who signed off on that deal with Alibaba, Ross Levinsohn, announced on Monday that he was leaving the Internet company. The departure of Mr. Levinsohn, who served as Yahoo’s interim chief executive for three months, was expected after the company’s board hired Marissa Mayer from Google as its new leader.

With its financing nearly in place, Alibaba is prepared not only to solidify its position as the most valuable privately held Internet company but also to take a big step toward separating itself from Yahoo, which has struggled to revive its brand and stock price.

Alibaba’s financing round includes a $1.5 billion sale of convertible preferred shares, based on a $43 billion equity valuation for the company, and the sale of $2.6 billion in common shares, at a roughly $35 billion valuation, the people briefed on the matter said. They requested anonymity because the discussions are private. Alibaba is also close to borrowing $4 billion.

The agreement with Yahoo stipulated that Yahoo could receive more than $7.1 billion if its Chinese partner raised money at a significantly higher valuation than it is expected to. Yet because the sale of preferred shares and common shares are subject to certain discounts, Alibaba is still expected to pay close to the original amount.

Still, that price represents a big return on Yahoo’s investment.

Yahoo invested $1 billion in Alibaba about seven years ago, gaining a 40 percent stake in what was then seen as a promising Chinese start-up company.

Now the Alibaba 40 percent stake makes up more than half of Yahoo’s $20 billion market value. Under the agreement hashed out in May, Yahoo will sell back another 10 percent of Alibaba shares when the Chinese company goes public and divest itself of the rest at later date.

Shares of Yahoo fell nearly 1 percent on Monday to close at $15.98 per share.

The two companies have butted heads a number of times in recent years. Alibaba’s decision in 2010 to spin off its Alipay online payment business prompted protests from Yahoo that it had not been properly consulted. The dispute was not settled until last summer.

Alibaba has long sought to buy back Yahoo’s interest in itself, though attempts to reach an agreement fell apart many times. Irritated that Yahoo was considering selling a minority stake in itself to investor groups last year, Alibaba threatened to wage a hostile takeover attempt to try to forestall such a possibility. The American company eventually abandoned the idea.

Alibaba is raising billions of dollars from a patchwork of international backers. Nearly a dozen investors, including hedge funds, sovereign wealth funds, mutual funds and private equity firms, will buy the preferred shares, these people said. The China Investment Corporation, that country’s sovereign wealth fund, will participate in the purchase of the common shares. The China Development Bank, is expected to provide a substantial portion of the loan to Alibaba.

Joseph C. Tsai, Alibaba’s chief financial officer, who has led the company’s fund-raising efforts, tried to limit the financing round to a small group of investors to restrict access to Alibaba’s financial information, one of the people briefed on the financing matter said.

The rapid rise of Alibaba, a collection of Chinese consumer and business-to-business e-commerce sites, illustrates how quickly momentum can shift on the global Web. Seven years ago, the company was eager for a capital infusion amid intensifying competition from domestic and international rivals like eBay, which owned an online auction site named Eachnet. In 2004, the year before Yahoo’s investment, Alibaba recorded just $68 million in revenue.

Since then, Alibaba’s sales have swelled.

In the first half of this year, Alibaba recorded a little more than $1.8 billion in revenue, more than 60 percent more than in the year-earlier period, people with knowledge of the matter said.

In contrast, Yahoo has fallen nearly as swiftly. In early 2008, Yahoo spurned a takeover offer from Microsoft — a bid that valued it at roughly $45 billion. Since then, Yahoo’s slumping advertising sales have slumped and it has lost market share to companies like Google and Facebook. Its shares, since its Alibaba investment, have lost more than half their value.

In an effort to appease investors, Yahoo has said the proceeds of Alibaba’s purchase will be returned to shareholders, possibly through a share buyback program.

Alibaba is expected to complete the repurchase of the 20 percent stake in the beginning of the fourth quarter.